What Are Pipeline Sales? (And How to Build a Sales Pipeline)
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Having a visible sales pipeline is vital for ensuring your team's ongoing sales success. Evaluating the data related to your sales activity typically equips you to make important decisions to help meet or exceed revenue goals. Understanding what sales pipelines are, and how to build one, is a vital part of creating successful sales tactics and achievable goals. In this article, we define pipeline sales, explain why they're important, describe the difference between pipelines and funnels, outline how to build a sales pipeline, and offer tips for managing one.
What are pipeline sales?
Pipeline sales, or sales pipelines, are tools that help sales teams visualize their sales process. It's a way of tracking sales that adds a degree of accountability and divides the process into more manageable tasks which are easier to track. It is a figurative pipeline, envisioned on a whiteboard, in a spreadsheet, or on the company's customer relationship management software. Sales pipelines help conceptualize where prospects are in their journey, from being simply a sales lead to being an established customer. Pipelines help salespeople track precisely where their deals, investments, and general sales efforts are operating at any given moment.
Why is your sales pipeline important?
Having a visible sales pipeline helps a sales team track their progress as it provides an accurate overview of what's required to increase the business' revenue. Improving the company's sales results in higher income for the business and higher commissions for sales representatives. A sales pipeline is also a valuable identification tool for finding obstacles that can affect sales progression.
How is a sales pipeline different from a sales funnel?
Sales funnels and pipelines are similar concepts, but have different functions. Both of these tools refer to a sales process that starts with an introduction and leads to an eventual conversation. The key difference between a sales pipeline and a sales funnel is that a pipeline focuses on the necessary steps for completing a task, while a funnel relates to the quantity and conversion rates of prospects that pass through your sales process.
How to build a sales pipeline
Here's a list of the steps you can take to build a sales pipeline on your own.
1. Identify the stages of the sale
The first step in building your sales pipeline is to establish the stages of the sale. This is a sequence of actions in which sales representatives prospect, pursue, and eventually close sales. Here is a list of the common stages of the sale:
Prospecting: The beginning of the sales process is in prospecting new clients or customers. Customers may approach the company themselves, or the company's sales representatives may approach them.
Qualification: In this next stage, sales representatives ask questions to better understand their prospect's needs, budget, and authority in the process of buying. Here, the sales representative is evaluating if it's worth taking the prospect to the next level in the process or if they can meet the requirements for completing a sale.
Consideration: A meeting between the sales representative and the prospect occurs to discuss solutions to the prospect's buying needs. Here, the representative verifies the need for the product or service and ensures the budget meets the purchase option.
Decision: This is the determinate stage of the sales outcome. In this stage, the sales representative identifies any remaining doubts and works to resolve them while answering questions to conclude the sale.
Close: The final result of sales efforts is to close the sale, which means the customer makes a purchase. This last stage turns the prospect into a paying customer.
2. Set goals and decide how your team defines success
The second step in building your sales pipeline is to set goals and establish how the sales team intends to define success. You can consider how many sales your team can close in a day, a week, or a month. Establishing quantifiable goals helps you to compare individual numbers against the team's average sales numbers. This can also provide key insights into areas that can use improvements to achieve the company's sales goals. By making even small changes, a sales team can dramatically affect their sales deliverables.
The more quantifiable the metrics you use to evaluate the sales team's success, the more accurate your estimation is likely to be. You can consider aspects that may affect your sales pipeline, such as holidays, staff numbers, or launching new products. These elements can mean a circumstantial increase or decrease in sales, depending on how they affect the team's ability to connect with prospective customers and close their sales. Consider other forms of deliverables, such as customer satisfaction, sales process efficiency, or sell-through rate to determine the true progress of your sales team.
3. Discuss the factors which help advance your deals
An essential part of the sales process is to discover what works and what doesn't in your pipeline. Some factors stimulate sales or ultimately help to progress the prospective customer to the next stage of the sales process. It's beneficial to focus your attention on the results that you have control over so you can work toward a better outcome. With a visible pipeline, you're likely better equipped to recognize the more vital factors which influence the success of your deals.
Discovering which factors can help you advance your deals can be a collaborative task. Involve the sales team in discussions about where the sales force can improve. This can help you gain insight into what they observe as sales representatives who conduct daily conversations with the customers. Once you've established the factors that can lead to positive development, create a plan with the team to implement those changes and create a series of steps designed to strengthen your sales results.
4. Establish a routine
A robust, visible sales pipeline offers an overview of each buyer's progress, which means having all the necessary information to analyze the next step you take in completing a deal. You can learn from these observations and identify the tactics that work best and increase sales. Be sure to develop every step of the sales process and use the information you gain to develop more efficient sales strategies and methods. Work to establish routines around each stage of your sales methodology and integrate those with your pipeline.
Creating a simple sales routine is helpful for teams in establishing a series of effective habits in their sales process. For instance, a sales routine may consist of the following steps in managing customers:
Calling: Calling a customer, usually in person but sometimes over the phone or via email, is a vital way of keeping in consistent contact with them. During this call, sales representatives check if there's anything the customer needs, if they're waiting for anything, or if there are any further sales opportunities.
Responsive activity: Following the call, the sales representative puts into action any necessary tasks for serving the customer. This can be placing orders, following up with deliveries, solving issues, or any other actionable task the sales representative can do in helping their customer.
Following up: Once every new task addressed in their call is complete, the sales rep follows up with the customer to check that the action has satisfied them. This is the final stage before repeating the routine with a new customer.
Tips for managing sales pipelines
A good pipeline requires maintenance for maximum impact. Here are a few tips that you can consider for maximizing the effectiveness of your sales pipeline:
Continue prospecting: Prospecting for new deals is a crucial component of creating consistent sales results. Stay consistent with pursuing new prospects by continuing to initiate contact with interested buyers and create leads at every opportunity.
Stay engaged: Staying engaged and maintaining contact with your prospect is essential for keeping an effective and ongoing relationship. You can keep notes of where you are in your correspondence to help you recall important details and remind you of where you are in the sales pipeline with each person.
Act according to the metrics: Continue to evaluate the sales team's progress and make decisions according to the results. The status of your sales pipeline can change frequently, so it's vital to always evaluate the best course of action and use the pipeline as a guide.
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